Summit Entertainment Executives Might Want to Buy Summit

Today it was reported by the LA Times that Summit Entertainment management (led by Rob Friedman and Patrick Wachsberger) team was considering a buy out of Summit Entertainment. The plan would involve Friedman and Wachsberger buying out their current investors, which include private equity firm Rizvi Traverse Management and film financing and production company Participant Media. It would leave the two chiefs of Santa Monica-based Summit in control, as opposed to other proposals currently on the table that would merge the independent studio with Lions Gate Entertainment or Miramax Films.

There is no question that Summit’s main investors are applying pressure to cash out. This move is natural seeing as Summit Entertainment has not really showed an ability to re-create the magic of it’s Twilight Franchise and the studio was a little known independent prior to it’s Twilight success.

The Investors in Summit Entertainment have seen huge returns from their investment. Summit Entertainment has a huge cash position, one more Twilight movie to release and no cost associated with the production of Breaking Dawn II. So if they are able to close a sale by year end the acquiring company would gain a win to it’s balance sheet for 2012 and one of the biggest movies of 2012 already produced and in the can. Not to mention all of the merchandising, DVD sales and more.

There has been no sign of the Twilight train slowing down but the risk vs current reward has the investors ready to cash in. Summit Entertainment has only confirmed that it is in discussions to sell to Miramax or Lionsgate. Lionsgate being the front runner in terms of acquisition and utilization of the Summit Management team where as the Miramax deal looks more like an asset and IP purchase.

Summit Entertainment has not confirmed that a management lead buyout has joined in the negotiations. If this does happen it will be a further indicator that the investors are making the decision on who, when and how much to sell Summit Entertainment for.

The reality is the Twilight Franchise will likely continue to be a huge part of the culture. The books have inspired the movies and the movies inspire those that have not yet read the books to do so. The fandom is similar to the Star Wars or Harry Potter fandom and they have rewarded Summit Entertainment and it’s investors with their time and money. The management team at Summit probably sees a bright future ahead. One in which it can become the next Lions Gate. For now they have lions at the gate and a crowd of hungry investors looking for something positive in a market with so much red it would make the Cullens happy.